Ashley Asks A Question: I just paid off my credit card debt! Now what do I do?

Guys. Real talk – I have some excellent news for you. Yours truly just paid off her credit card debt! I’m not going to tell you how much it was because we don’t know each other like that but, let’s just say I’m proud of myself and so glad to have finally ended the trouble 23 year old me caused (well, also 24 year old me, and probably a little of 25 year old me).

This led me to this week’s Ashley Asks A Question. I don’t want to use the cards anymore because frankly, I want to stare at that zero balance forever but my credit score could use some rebuilding. What’s a gal/guy to do?! Turn to Eddie Goepp.

Let’s get to it.

I just paid off my credit card debt. Now what?

Eddie’s Answer

That’s fantastic, well done! Paying off debt is no easy task and that’s something that should be celebrated.

Leaving the credit line open is completely fine to do. In order to keep building credit, many people will use a credit card to pay for a cheap monthly subscription like Netflix or the gym. You must then be sure to pay it off each month. I recommend setting up an auto-pay to your credit card so you don’t even have to think about it. Other people use their credit card for gas (which is fine), but using it for a subscription based expense works well since it doesn’t require you to carry the card around. Carrying the card around can equal unnecessary temptation!

So the next step on the savings hierarchy is to build your emergency fund. As we all know, it’s not the most exhilarating topic, but it can help you avoid future credit card debt. Having an emergency fund in place will help when the unexpected events arise as you won’t have to turn to the credit card. We recommend keeping 3 – 6 months’ worth of your living expense in cash.

Bottom line: After you pay off your card, don’t get into debt again and get yourself a stash of cash.